Nebraska's cattle producers aren't anti-ethanol, but they are concerned about the industry's sustainability in the state, according to Michael Kelsey, executive vice president of the Nebraska Cattlemen's Association. "In Nebraska, we are in a very unique situation in that we have all of the inputs and outputs related to ethanol and the opportunity to take advantage of those," Kelsey said. "We feel like Nebraska is just set upon a precipice to explode into huge economic growth largely driven by ethanol. We want to ride the wave, but we want to be sure we are able to do it for a long period of time."

The organization recently adopted a resolution opposing ethanol mandates and subsidies given to the ethanol industry. It recommended a variable-rate tariff on oil imports to maintain stable prices that would allow the ethanol industry to grow and prosper. Kelsey said the association consulted with the Nebraska Corn Growers Association and the Nebraska Ethanol Board while it was drafting the resolutions. "The Nebraska Cattlemen's Association is very much in favor of a strong and very stable ethanol industry," Kelsey said. "The cattle industry and the ethanol industry very much complement each other because of our ability to take advantage of the coproducts, distillers grains, etc."

Kelsey said one factor pushing Nebraska cattlemen to adopt an ethanol policy was the uncharacteristic behavior of the corn market over the past year. In the fall of 2006, corn prices rose during harvest despite a USDA-estimated 10.7 billion-bushel corn harvest. "The dynamic is that corn is now priced as a fuel, not as a food," he said. "So we need to adjust to that and look at what is going on there."

What the cattle industry wants to avoid is an unstable corn market, in which prices could top $4 per bushel at one point and crash below $2 a few months later. "Our thought right now is that [the ethanol industry] is too volatile," Kelsey said. "There are too many unknowns in terms of the ethanol industry and how it's affecting our industry. So we need to get our arms around it."

If the two industries can work together, Kelsey sees a bright future. "It's not unrealistic to dream that Nebraska could be the No. 1 cattle-feeding state in the union," he said. "The primary driver behind that will be the growth of the ethanol industry. We want to make sure that happens, but we can't have that happen and [then] the ethanol industry busts."